Throughout 2023, we witnessed a significant increase in optimistic sentiment in the cryptocurrency market, with expectations that such enthusiasm will continue into 2024 thanks to enhanced adoption of innovations, increased profitability, and integration of innovative technologies. Despite this, the sector sees new currencies and assets, volatile regulations, security concerns, and technological novelties, highlighting its dynamic nature and creating challenges for predicting future development directions and adapting to them.
However, certain trends are emerging that are likely to sustain the interest sparked in 2023 in the realm of cryptocurrencies. Among these are the impressive growth in Bitcoin's value, increased profitability of Coinbase, active spread of Ethereum, the growing influence of stablecoins, and the introduction of advanced technologies, such as artificial intelligence, into the cryptosphere.
This article explores the trends that are expected to define the industry in 2024.
- Bitcoin Growth
- Development of Coinbase
- Acceleration of Ethereum's Price Growth
- Evolution of Stablecoins
- Innovations in Network Technologies for Traditional Finance
- Artificial Intelligence, Decentralization, and Cryptocurrency
- Conclusion for Investors
Last year, Bitcoin demonstrated a 150% growth, and already in early January 2024, its value exceeded $47,000. Analysts suggest that the BTC price will continue to rise throughout the year, with the possibility of reaching $80,000 by its end.
Several aspects support these expectations. For example, the approval by the Securities and Exchange Commission (SEC) of a Bitcoin ETF on the spot market, making Bitcoin accessible to a wide audience of investors through their brokerage accounts.
Bitcoin ETFs on the spot market, which are funds traded on exchanges and holding this coin as the main asset, allow investors to influence the price without the need to directly own it. This attracts more investors, thereby increasing demand and price.
Another factor that could cause a significant jump in Bitcoin's price is the upcoming halving event in April 2024. These events, occurring approximately every four years, halve the mining reward for BTC, thereby reducing the number of new coins entering circulation, which historically led to price increases due to the creation of scarcity.
Development of Coinbase
Coinbase, being the largest cryptocurrency exchange in the US by trading volume, has strengthened its brand among investors, providing them significant influence on pricing. In 2023, the company's shares grew by 418%, and its revenues increased by 14%. There are good reasons to expect this growth to continue in 2024, with the possibility of revenue doubling.
ETFs and Bitcoin halving act as two main catalysts for the anticipated growth of Coinbase, as both events should contribute to increased demand for the asset, which constitutes a large portion of the trading volume on the platform.
The approval of Bitcoin ETFs is also likely to lead to broader institutional adoption, as companies that previously avoided cryptocurrencies may start investing thanks to the regulated and familiar investment structure of ETFs, such as:
- insurance companies;
- pension funds;
- other large investors.
Coinbase currently is the sole provider of custody services for all proposed Bitcoin ETFs, promising significant revenue from custody fees.
Acceleration of Ethereum's Price Growth
Ethereum is also expected to demonstrate rapid growth in 2024, with forecasts of revenue doubling.
This is due to the planned critical update, known as EIP-4844, expected in the second half of the year, which will increase the network's throughput to 100,000 transactions per second and reduce transaction costs by 90%, making the network more accessible to a wider audience and stimulating its adoption.
For many years, Ethereum has sought to improve the adoption of crypto projects, offering smart contract functionality, serving as the basis for the DeFi ecosystem, providing a platform for tokenization and NFT sales, as well as allowing the creation and issuance of new tokens. Lower transaction costs will make the platform even more attractive to users.
Evolution of Stablecoins
In anticipation of 2024, significant attention is focused on stablecoins, to which investors should pay attention.
In the second half of 2023, several events occurred:
|Announced an advanced tokenized payment platform
|Launched its own stablecoin
|Expanded settlement capabilities in stablecoins
These events strengthen the optimistic forecast for stablecoins in 2024, with Bitwise's forecast that stablecoins will surpass Visa in settlement volume.
In 2023, there were also significant improvements in the regulation of stablecoins. According to Cointelegraph, last year, 25 countries adopted rules concerning this type of asset. The US is expected to take steps to regulate stablecoins next year, strengthening their central role in oversight and regulation of issuers and ensuring the country's status as a hub for growing enterprises playing a key role in expanding the use of the US dollar and other stablecoins in the global economy.
Innovations in Network Technologies for Traditional Finance
In 2024, growth in network innovations is likely planned. In 2023, JP Morgan collaborated with several blockchain companies to demonstrate how proof concepts can allow asset managers to tokenize funds on a selected blockchain, purchase, and rebalance their positions in tokenized assets across different chains.
This coincides with the growing interest of the traditional financial sector in cryptocurrencies and blockchain technology. In 2024, it is expected that even more traditional financial companies will explore network innovations through partnerships and services as regulatory clarity improves.
Artificial Intelligence, Decentralization, and Cryptocurrency
The integration of artificial intelligence tools into the crypto industry promises significant prospects, and we expect some of this potential to be realized in 2024. More companies will use artificial intelligence algorithms to speed up transactions, analyze data, and increase security and efficiency.
Trading tools using artificial intelligence will become more advanced and user-friendly, making crypto trading accessible to a wider audience. Artificial intelligence will also become an important part of real-time sentiment analysis, regulatory compliance, and forecasting.
In 2024, growth in decentralized prediction markets is also expected. While such markets existed previously, cryptocurrency takes them to a new level, making them unlimited and automating payouts and winner determination. Decentralized prediction markets are expected to become a key platform for betting on sports events and other forecasts.
Finally, financial advisors are expected to increase their investments in cryptocurrency in 2024. According to a Bitwise survey, 98% of financial advisors investing in cryptocurrency on client accounts plan to maintain or increase this volume next year.
Conclusion for Investors
As seen, 2024 promises many exciting trends in the world of cryptocurrency. Bitcoin is expected to increase its value and popularity, Coinbase revenues to grow, Ethereum to assert itself as a powerful blockchain, and the adoption of stablecoins to expand.
Also anticipated is that more financial companies will explore network innovations and artificial intelligence, playing an increasingly significant role in the cryptocurrency world. If you are already investing in cryptocurrency, it is recommended to regularly review your portfolio to assess how these trends may impact your investments.